Stocks Close Flat; Investors Cheer Deal News

NEW YORK ( TheStreet) -- Major U.S. stock averages were little changed Thursday following an early selloff, as a number of high-profile corporate deals and better-than-expected jobs data bolstered risk appetite despite a stronger dollar and sour economic news from Europe and Japan.

The S&P 500 tacked on 1 point to 1,521. The Nasdaq added 2 points to 3,199.

Most sectors in the broader market traded higher. The sharpest decliners included utilities and consumer cyclicals. Consumer non-cyclicals, conglomerates and basic materials were the largest gainers.

Volumes totaled 3.72 billion shares on the New York Stock Exchange and 1.92 billion on the Nasdaq. Advancers edged decliners by four issues on the Big Board, and by a 1.2-to-1 ratio on the Nasdaq.

In corporate deal news, H.J. Heinz (HNZ) shares surged 20% as the company agreed to be acquired by Berkshire Hathaway (BRK.A) and Brazil's 3G Capital in a transaction valued at $28 billion. Berkshire shares closed up 1%.

The merger of AMR(AAMRQ.PK) subsidiary American Airlines and US Airways (LCC) was formally announced Thursday. US Airways shares tumbled 4.6% and AMR shares soared 63%.

Cardinal Health (CAH) shares increased 1.2% as the health-care-services company announced plans to acquire privately held medical-supplies provider AssuraMed for $2.07 billion.

Peter Cardillo, chief market economist at Rockwell Global Capital, said the deals are a good sign as far as the market is concerned.

"Any time you get a string of deals almost on weekly basis, that's an affirmation of good prospects ahead in terms of economic activity," he said. "When the economy is poised to grow, you don't downsize. When the economy is poised to just muddle along, you don't increase, you decrease."

JJ Kinahan, chief derivatives strategist at TD Ameritrade, said options traders this week are also "most assuredly" paying attention to options expiration day on Friday.

"We still do get some movement (particularly in underlying indexes such as SPX) on expiration Thursday and Friday so that is something to definitely watch," Kinahan said. He added that the 1,525 level in the SPX is where traders will start to see resistance and the market may have trouble climbing through. He noted that the SPX was positive Wednesday with a positive VIX and he did see traders purchasing options with the thought that they could see a temporary breather in the S&P over the next two days.

European markets were retreating after Eurostat, the statistics office of the European Union, said flash estimates show that gross domestic product fell by 0.6% in the euro area during the fourth quarter of 2012 compared with the previous quarter.